Accounts And Notes Receivable, Net And Accounts Receivable Securitization

3 Months Ended

Oct. 31, 2017

Accounts And Notes Receivable, Net And Accounts Receivable Securitization

Accounts and notes receivable, net and accounts receivable securitization

Accounts and notes receivable, net consist of the following:

	October 31, 2017			July 31, 2017
Accounts receivable pledged as collateral	$	137,244		$	109,407
Accounts receivable	46,318			47,346
Note receivable - Jamex, current portion	10,000			10,000
Other	294			307
Less: Allowance for doubtful accounts	(2,428		)	(1,976		)
Accounts and notes receivable, net	$	191,428		$	165,084

On April 28, 2017, Ferrellgas entered into a fifth amendment to its accounts receivable securitization facility to modify the maximum consolidated leverage ratio covenant and the consolidated interest coverage ratio covenant.

Consolidated leverage ratio

The consolidated leverage ratio is defined as the ratio of total debt of the operating partnership to trailing four quarters earnings before interest expense, income tax expense, depreciation and amortization expense ("EBITDA") (both as adjusted for certain, specified items) of the operating partnership, as detailed in Ferrellgas' secured credit facility and accounts receivable securitization facility.

The current maximum consolidated leverage covenant ratios are as follows:

Date	Maximum leverage ratio
October 31, 2017	7.75
January 31, 2018	7.75
April 30, 2018	7.75
July 31, 2018 & thereafter	5.50

Ferrellgas' consolidated leverage ratio was 7.57x as of October 31, 2017. See additional disclosure about Ferrellgas' financial covenants in Note E - Debt.

Consolidated interest coverage ratio

The consolidated interest coverage ratio is defined as the ratio of trailing four quarters EBITDA to interest expense (both as adjusted for certain, specified items) of the operating partnership, as detailed in Ferrellgas' secured credit facility and accounts receivable securitization facility.

The current minimum consolidated interest coverage ratios are as follows:

Date	Minimum consolidated interest coverage ratio
October 31, 2017	1.75
January 31, 2018	1.75
April 30, 2018	1.75
July 31, 2018 & thereafter	2.50

Ferrellgas' consolidated interest coverage ratio was 1.93x as of October 31, 2017; the margin allows for approximately $12.1 million of additional interest expense or approximately $21.1 million less EBITDA. See additional disclosure about Ferrellgas' financial covenants in Note E - Debt.

At October 31, 2017, $137.2 million of trade accounts receivable were pledged as collateral against $88.0 million of collateralized notes payable due to the commercial paper conduit. At July 31, 2017, $109.4 million of trade accounts receivable were pledged as collateral against $69.0 million of collateralized notes payable due to the commercial paper conduit. These accounts receivable pledged as collateral are bankruptcy remote from the operating partnership. The operating partnership does not provide any guarantee or similar support to the collectability of these accounts receivable pledged as collateral. 

As of October 31, 2017, Ferrellgas had received cash proceeds of $88.0 million from trade accounts receivables securitized, with no remaining capacity to receive additional proceeds. As of July 31, 2017, Ferrellgas had received cash proceeds of $69.0 million from trade accounts receivables securitized, with no remaining capacity to receive additional proceeds. Borrowings under the accounts receivable securitization facility had a weighted average interest rate of 3.7% and 4.0% as of October 31, 2017 and July 31, 2017, respectively.

Ferrellgas, L.P. [Member]

Accounts And Notes Receivable, Net And Accounts Receivable Securitization

Accounts and notes receivable, net and accounts receivable securitization

Accounts and notes receivable, net consist of the following:

	October 31, 2017			July 31, 2017
Accounts receivable pledged as collateral	$	137,244		$	109,407
Accounts receivable	46,318			47,346
Note receivable - Jamex, current portion	10,000			10,000
Other	294			307
Less: Allowance for doubtful accounts	(2,428		)	(1,976		)
Accounts and notes receivable, net	$	191,428		$	165,084

On April 28, 2017, Ferrellgas, L.P. entered into a fifth amendment to its accounts receivable securitization facility to modify the maximum consolidated leverage ratio covenant and the consolidated interest coverage ratio covenant.

Consolidated leverage ratio

The consolidated leverage ratio is defined as the ratio of total debt of the operating partnership to trailing four quarters earnings before interest expense, income tax expense, depreciation and amortization expense ("EBITDA") (both as adjusted for certain, specified items) of the operating partnership, as detailed in Ferrellgas, L.P.'s secured credit facility and accounts receivable securitization facility.

The current maximum consolidated leverage covenant ratios are as follows:

Date	Maximum leverage ratio
October 31, 2017	7.75
January 31, 2018	7.75
April 30, 2018	7.75
July 31, 2018 & thereafter	5.50

Ferrellgas, L.P.'s consolidated leverage ratio was 7.57x as of October 31, 2017. See additional disclosure about Ferrellgas' financial covenants in Note E - Debt.

Consolidated interest coverage ratio

The consolidated interest coverage ratio is defined as the ratio of trailing four quarters EBITDA to interest expense (both as adjusted for certain, specified items) of the operating partnership, as detailed in Ferrellgas, L.P.'s secured credit facility and accounts receivable securitization facility.

The current minimum consolidated interest coverage ratios are as follows:

Date	Minimum consolidated interest coverage ratio
October 31, 2017	1.75
January 31, 2018	1.75
April 30, 2018	1.75
July 31, 2018 & thereafter	2.50

Ferrellgas L.P.'s consolidated interest coverage ratio was 1.93x as of October 31, 2017; the margin allows for approximately $12.1 million of additional interest expense or approximately $21.1 million less EBITDA. See additional disclosure about Ferrellgas' financial covenants in Note E - Debt.

At October 31, 2017, $137.2 million of trade accounts receivable were pledged as collateral against $88.0 million of collateralized notes payable due to a commercial paper conduit. At July 31, 2017, $109.4 million of trade accounts receivable were pledged as collateral against $69.0 million of collateralized notes payable due to the commercial paper conduit. These accounts receivable pledged as collateral are bankruptcy remote from Ferrellgas, L.P. Ferrellgas, L.P. does not provide any guarantee or similar support to the collectability of these accounts receivable pledged as collateral. 

As of October 31, 2017, Ferrellgas, L.P. had received cash proceeds of $88.0 million from trade accounts receivables securitized, with no remaining capacity to receive additional proceeds. As of July 31, 2017, Ferrellgas, L.P. had received cash proceeds of $69.0 million from trade accounts receivables securitized, with no remaining capacity to receive additional proceeds. Borrowings under the accounts receivable securitization facility had a weighted average interest rate of 3.7% and 4.0% as of October 31, 2017 and July 31, 2017, respectively.